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The general assembly finds that conventional funding sources for emerging and expanding disadvantaged businesses are limited or nonexistent.
The general assembly further finds that promoting and encouraging economic opportunity and development within the state's minority community is a worthy public purpose.
Such economic opportunity and development serve the health, safety and welfare of all citizens through creation of long-term employment opportunities, reduction of unemployment, diminished demand for costly social services and increased revenue collections.
There is created within the state treasury a restricted account not to exceed fifty thousand dollars ($50,000) to be known as the “disadvantaged business loan guarantee account.”
Amounts in the account at the end of any fiscal year shall not revert to the general fund but shall remain available to the department for the purposes set forth in this section.
Amounts in the account shall be invested for the benefit of the account by the state treasurer pursuant to § 9-4-603. The account shall be administered by the commissioner.
There is created within the department the disadvantaged business loan guarantee program.
The purpose of the loan guarantee program is to ensure the availability of conventional financial resources to emerging and expanding disadvantaged businesses by guaranteeing loans for disadvantaged businesses.
To qualify for a loan guarantee, a disadvantaged business must demonstrate to the satisfaction of the commissioner that the loan will be fully repaid and will produce economic benefit for the community and state.
The department is authorized to determine the total dollar amount of loans to be guaranteed, subject to a maximum of five (5) times the balance of appropriated funds within the loan guarantee account, plus income, less expenses associated with the program.
The department is authorized to charge a premium to the borrower to help defray the cost of administering the program.
The department may establish other terms and conditions for guarantees of loans.
The total aggregate amount of the loan guarantee may not exceed eighty percent (80%) of any loan.
All documentation evidencing a loan guarantee shall clearly state that such guarantee is an obligation of the disadvantaged business loan guarantee account and not of the general fund or the state of Tennessee, and that any amounts required to be paid pursuant to the loan guarantee are subject to the availability of sufficient funds within the guarantee account.
The commissioner shall annually submit to the governor and the speakers of the senate and house of representatives, within ninety (90) days after the end of the fiscal year, a complete and detailed report setting forth the operations, transactions and accomplishments of the disadvantaged business loan guarantee fund.